LANSING (AP) -- Michigan Governor Rick Snyder is asking for "shared sacrifice" from everyone, from senior citizens to state workers, public schools to city halls, as he seeks to make up a huge budget gap with a massive budget overhaul.
Even before Snyder presented the plan to lawmakers Thursday, he was defending it. He says it would put the economically troubled state on sound financial footing.
Snyder released details on his $45 billion budget proposal to the Associated Press on Wednesday. They include dropping the individual income tax rate from 4.35 percent to 4.25 percent on October 1. The tax will then remain at 4.25 percent rather than being decreased to 3.9 percent in future years as scheduled.
- Eliminate the state income tax exemption for pensions, but Social Security benefits will continue to be exempt.
- Eliminate the Michigan Business Tax and replace it with a flat 6 percent corporate income tax on major corporations.
- Eliminate business credits awarded for films, Brownfield redevelopment, the Michigan Economic Growth Authority, etc., although current commitments will be honored. Also, set aside $25 million for film credits from the 21st Century Jobs Fund.
- Roll funding for universities and community colleges from the general fund to the school aid fund, the main funding source for K-12 schools.
- Cut per pupil funds $300, in addition to the currently budgeted $170 per pupil reduction.
- Eliminate statutory revenue sharing payments for cities, villages, and townships in Fiscal Year 2012, leading to a net savings of $92.1 million. The change impacts 509 local units of government. It will increase constitutional revenue sharing by 4 percent, to $659 million.
The proposal also has $200 million for a new incentive-based revenue sharing program for cities, villages, and townships that meet specific standards to be detailed in March.
It sets a lifetime limit of 48 months for residents to receive welfare payments, with exemptions for incapacity and hardship.
Also in the proposal: closing the Shawono Center in Grayling and cut 20 beds in capacity at the Maxey Training School in Whitmore Lake, resulting in $787,000 general fund savings.
- Eliminate 300 field worker positions in the Department of Human Services.
- Close one prison to be named later this year.
- Reduce the number of Michigan State Police posts, saving $3.2 million.
- Reduce state aid to libraries in the Department of Education budget by $2.3 million in the general fund, with $950,000 directed to the Michigan eLibrary, resulting in net savings of $1.4 million.
Snyder also suggests privatizing food service and prison stores operations in Michigan prisons, and that resident care aide services at the Grand Rapids Veterans' Home be competitively bid.
And, turn the dairy farm inspection program over to industry field representatives certified by the Department of Agriculture.
Governor Snyder will formally reveal his budget plan on Thursday.
(Copyright ©2011 by The Associated Press. All Rights Reserved.)
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